Turning around michigan the michigan turnaround plan
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Turning Around Michigan: The Michigan Turnaround Plan. Business Leaders for Michigan 75 of Michigan’s most prominent company CEO’s Over 300,000 jobs throughout Michigan Statewide representation – Jobs in every county in Michigan Over $1 Trillion annual revenue.

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Turning Around Michigan: The Michigan Turnaround Plan

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Turning around michigan the michigan turnaround plan

Turning Around Michigan:

The Michigan Turnaround Plan


Turning around michigan the michigan turnaround plan

  • Business Leaders for Michigan

  • 75 of Michigan’s most prominent company CEO’s

  • Over 300,000 jobs throughout Michigan

  • Statewide representation – Jobs in every county in Michigan

  • Over $1 Trillion annual revenue


Michigan a state in crisis

Michigan: A State In Crisis

  • 1 of every 2 jobs lost in US since 2000 have been in Michigan

  • Only 25% of Michigan job losses from automotive sector

  • Companies pay a 3-4 percentage point profit penalty to be in Michigan

  • Declining population growth

  • Declining per capita income

  • A state with no holistic, cohesive approach to foster job growth


Result relatively smaller

Result: Relatively Smaller

Source: U.S. Census Bureau Population Estimates Program


Result relatively poorer

Result: Relatively Poorer

Source: U.S. Bureau of Economic Analysis


Result declining or flat tax revenue

Result:Declining or Flat Tax Revenue

Billions

TAX INCREASES

Source: Michigan Senate Fiscal Agency, “Major Sources of Tax Revenue”


Result right spending priorities

Result: Right Spending Priorities?

Source: State of Michigan Executive Budget FY 2009, “Historical Expenditures/Appropriations Gross”& U.S. Inflation Calculator.com


Cause uncompetitive business climate

Cause: Uncompetitive Business Climate


Cause uncompetitive business climate1

Cause: Uncompetitive Business Climate


Setting a goal for michigan

Setting a Goal for Michigan


Top ten where we could be

2007 (BEFORE CURRENT RECESSION)

IF WE HAD BEEN IN TOP TEN (in 2007)

Top Ten: Where We Could Be

Note: Rankings do not include the District of Columbia; See source notes


Michigan s five step turnaround plan

Michigan’s Five-Step Turnaround Plan


Step 1 changing the way we manage our finances

Step 1: Changing the Way We Manage Our Finances

WHERE WE ARE

A PATH FORWARD

Form an independent council of respected public and private sector economists to complete quarterly revenue and spending estimates

Conduct a quarterly survey of a cross-section of Michigan businesses to identify sales & hiring trends

Adopt two-year budgets to more accurately project the on-going cost of programs

  • Constant revenue & spending forecast “surprises”


Step 2a right size spending now

Step 2a: Right-Size Spending Now

WHERE WE ARE

A PATH FORWARD

Reduce state employee compensation to the average compensation of state workers in the US or the average of MI private sector workers (Potential savings: $287 - $1,383M as of FY 2007-08)

Reduce the state workforce by 5-10% (Potential savings: $236 - $473M as of FY 2007-08)

Adjust state employee health care premium contributions to the national public sector average (Potential savings: $74M)

  • Most structural reforms have long-term payoffs

  • Labor & benefits are the state’s largest cost-driver: Average total compensation for state employees was almost $17,000 more than the private sector average in Michigan in 2007

  • State employees pay 5%-10% of their health premium costs, compared to 17.8% national average for state workers


Step 2b structural reforms to ensure sustainability

Step 2b: Structural Reforms To Ensure Sustainability

WHERE WE ARE

A PATH FORWARD

Encourage & enable local government service sharing (Minimum estimated savings: $250M)

Encourage & enable local school district service sharing (Minimum estimated savings: $300M)

Enact corrections management and sentencing reforms (Estimated savings: $400M)

Eliminate optional services that exceed federal standards (e.g. optional Medicaid services)

Eliminate duplicate state programs (e.g. MIOSHA vs. OSHA)

  • Michigan has 1,800 units of local government and over 500 local school districts

  • Michigan’s incarceration rate is 45% higher than the Great Lakes average


Step 3a getting michigan competitive short term

Step 3a: Getting Michigan Competitive – Short-term

WHERE WE ARE

A PATH FORWARD

Make Michigan’s business tax system competitive

Reduce the MBT to move Michigan significantly toward becoming a “Top Ten” state in lowest tax burden

  • Michigan ranks between 27th and 35th worst in overall business tax burden

  • Michigan businesses pay on average 3-4% more of their profits in taxes than the average of the “ten best” business tax and many peer states


Step 3b getting michigan competitive long term

Step 3b: Getting Michigan Competitive –Long-term

A PATH FORWARD

Make the overall cost of doing business in Michigan competitive

Eliminate the personal property tax

Require fiscal notes that identify the compliance costs for all new regulations

Create a regulatory report card that tracks responsiveness

Prohibit state regulations that exceed federal standards, such as state-based ergonomic standards


Step 4 investing in our future

Step 4: Investing In Our Future

WHERE WE ARE

A PATH FORWARD

The state should make investments that will have the greatest long-term economic impact

Investments should focus on:

Higher education

Infrastructure

Great Lakes and cities

  • When Michigan was a wealthy state it could afford not to set priorities; in today’s economy it cannot

  • Other states, like North Carolina, prioritized investments


Step 4a investing in our future education

Step 4a: Investing In Our Future –Education

WHERE WE ARE

A PATH FORWARD

Improve K-12 performance:

Consolidate administration of Michigan’s 500+ school districts by reducing per pupil state funding for districts that fail to share services

Ensure “Top Ten” higher education:

Rationalize the number of colleges & universities to a number the state can support long-term

Increase funding to remaining community colleges & universities to achieve “Top Ten” status

  • Average K-12 performance must improve to match per capita spending (Spending: 8th; Performance: 34th)

  • Higher education investment should increase from current status of 38th to “Top Ten”


Step 4b investing in our future infrastructure

Step 4b: Investing In Our Future -Infrastructure

WHERE WE ARE

A PATH FORWARD

Adopt new funding formulas to ensure Michigan has adequate revenues to support a “Top Ten” transportation infrastructure

Improve to “Top Ten” road condition

Expand freeway connectivity to adjoining states

Expand passenger air service throughout Michigan

Support mass transit in dense population corridors

  • Michigan scores below average in the condition of its highways – a critical need for a peninsula state


Step 4c investing in our future great lakes cities

Step 4c: Investing In Our Future -Great Lakes & Cities

WHERE WE ARE

A PATH FORWARD

Develop a comprehensive Great Lakes strategy

Develop an urban agenda

  • The Great Lakes provide Michigan a defining “place” to attract and retain talent in a global marketplace, yet Michigan lacks a holistic strategy to leverage this unique asset

  • Michigan needs an “urban strategy” - a critical need for retaining and attracting talent and improving Michigan’s image


Step 5 accelerating growth

Step 5: Accelerating Growth

WHERE WE ARE

A PATH FORWARD

Support collaborative regional growth strategies

Accelerate growth by supporting innovation and entrepreneurship across all sectors

Develop strategies to grow broad business sectors that leverage Michigan’s key assets (e.g.: energy, engineering)

  • Michigan does not operate cohesively

  • Michigan’s economic development strategy emphasizes:

    • Making direct investments in individual companies

    • Incentivizing site location

    • Targeting narrow business sectors


Turnaround plan implementation

Turnaround Plan Implementation

  • Introduce BLM & Plan to media/stakeholders

    • Endorsements &Support from

      • 75% of state’s major newspapers

      • Several major organizations & associations

      • Democrats & Republicans

  • Launch Public Information Campaign

Track 1: BUILD SUPPORT


Turnaround plan implementation1

Convene State Leaders

Build a Legislative Coalition

Ten Step Agenda for 2010

Turnaround Plan Implementation

Track 2: ADVANCE A LEGISLATIVE AGENDA


Legislative agenda

Legislative Agenda

  • Establish a 2-year budget cycle

  • Form an independent public-private revenue forecasting

  • Remove barriers for local municipalities and school districts to increase efficiency

  • Consolidate school administrative functions

  • Adjust public employee health care contributions to the national public sector average

  • Reduce state employee compensation to the average compensation of state workers

  • Reduce the state workforce by 5%-10%

  • Enact reforms to Michigan’s Corrections system that bring our costs in line with other mid-west states

  • Make Michigan more competitive by reforming the Michigan business tax structure

  • Require all legislation & regulatory change proposals that impact business to include fiscal notes


Turnaround plan implementation2

Turnaround Plan Implementation

Track 3: EVALUATE & SUPPORT CANDIDATES

  • Questionnaires

  • Interviews

  • PAC

  • Endorsements


Michiganturnaroundplan com

MichiganTurnaroundPlan.com


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